Shady things you should know about Papa John

You've seen Papa John's face on countless pizza commercials, but what do you really know about the man—or the company—behind the pizza? The guy you see in the commercials isn't an actor. He's John Schnatter, and he really is the founder and CEO of Papa John's, one of the biggest pizza (and most controversial) chains in the country. We're guessing there's still a lot you need to learn about the guy, aside from the fact that he makes a darn good pizza, so here are some things you might not know about him, and the company he created.

Stores have been used in the drug trade

If you happened to ask for extra olives on your Papa John's pizza from a certain Washington State location, you might have gotten a surprise. One store wasn't just selling pizza, but cocaine, Oxycodone, LSD, ecstasy, marijuana, and methamphetamine were on the menu as well. Undercover officers bought drugs from restaurant employees on numerous occasions in a 2017 sting called Operation Extra Olives, and established the routine: after placing their order, they would simply wait in the parking lot for their pizza box full of drugs.

Papa John's issued an official statement, saying, "Papa John's has zero tolerance for this type of offensive and illegal behavior. The franchisee has confirmed that the employees involved with the situation are no longer employed and we apologize for their actions. The franchisee is working in full cooperation with local law enforcement to resolve this matter."

That store isn't the only one that's been linked to the drug trade, either. In 2013, a Papa John's delivery man in Brooklyn was arrested for delivering way more than just pizza. Over the two years law enforcement had been investigating the store, around $40,000 worth of cocaine was sold to undercover officers alone.

The company was once sued over 16 cents

Going to court over 16 cents seems completely insane, but that's exactly what Zachary Tucker did in 2016. According to the lawsuit — which was filed in Madison County, Illinois — Papa John's had been breaking state laws with every delivery its employees made. While Illinois law states that business weren't allowed to collect taxes on delivery fees (as long as the price of the items were equal to or more than the delivery cost), Papa John's had been doing exactly that. That meant the extra 16 cents Tucker found on his bill was representative of a bigger problem, and he filed a class action lawsuit that cited things like breach of contract, negligent misrepresentation, and violation of the Illinois Consumer Fraud Act.

According to the official website for the class action lawsuit settlement, anyone who placed a delivery order from Papa John's between May 5, 2009 and May 6, 2016 was eligible for a piece of the pizza pie. For their part, Papa John's denied any wrongdoing, but says they opted to settle the lawsuit by paying claimants instead of going through what was bound to be a lengthy and expensive trial.

They've had all kinds of disputes over paying their employees

Papa John's and its franchisees have had more than their fair share of disputes over paying their employees, and in 2015, more than 19,000 delivery drivers were awarded a settlement for their part in a lawsuit that had originally been filed in 2009. According to the suit, drivers across six states were unfairly paid for their services. While AAA and the IRS both recommended a wage of between 45 and 55 cents per mile, Papa John's was regularly paying their delivery drivers between $1 and $1.50 per delivery, regardless of how many miles were traveled. The settlement was for no small change, either — the drivers split a whopping $12.3 million, dropping the company's quarterly profits by 36 percent.

That same year, Papa John's made headlines again when one of their franchisees was sent to jail for not paying his employees overtime. The New York City-based owner of nine locations was accused of creating false employees to bill overtime hours to, avoiding paying his actual employees time-and-a-half for their work. More than 300 employees were targeted by the scheme, and Abdul Jamil Khokhar ended up serving 60 days in jail and paying out $230,000.

Schnatter's hands are insured

The hands that flipped the first Papa John's pizza are worth millions — literally. In 2015, Schnatter insured his hands for $15.3 million, insuring he's covered should anything happen to his precious digits making him no longer able to toss dough or spread sauce.

He owes someone a lot of pizza

When Schnatter was a college student at Ball State University, he was dreaming of the day he could open his own pizza shop. He approached a marketing major who lived a few doors down in his dorm and asked him to come up with a name and logo for his future shop, Schnatter explained to Business Insider. With that, the name and logo for Papa John's was born. He promised the designer he would give him a free pizza a week, for life, if his pizzeria plans ever took off. Only one problem — Schnatter has no idea who the guy is, and he's never come forward. Schnatter estimates that by now, he owes the clever man about $16,000 in pizza.

They were sued over sending text message spam… twice

In 2013, Papa John's was on the receiving end of another massive class action lawsuit, this time for sending around 500,000 spam text messages to customers. The suit's plaintiffs were looking for $250 million from the pizza giant, claiming it wasn't just the sheer volume of messages that were annoying, but the fact that some customers spammed in the middle of the night, and customers hadn't even authorized the service. While they were looking for at least $500 per text message to be paid out, they didn't get quite that much. Papa John's settled the suit for $16.5 million in 2013, even though they claimed they weren't at fault. Instead, they blamed the texting service they employed and claimed the customers in question had given the go-ahead to send the messages when they placed their order.

Shockingly, that's not the only time such a lawsuit has been filed against Papa John's, and in February 2017 Jonathan Anozie sued them for relentlessly bombarding him with deals for 2 large, 5-topping pizzas for $9.99. He cited mental anguish as the reason for his lawsuit, but that's nothing compared to the Florida couple who had Google wrongly list their phone number as being for a Papa John's location. Imagine getting dozens of phone calls a day from people looking to order a pizza, and you'll know what mental anguish looks like.

There have been a number of racism accusations

Companies only have so much control over what their employees say or do, but Papa John's has been doing a huge amount of damage control when it comes to accusations of racism against their employees.

In 2013, John Schnatter himself issued a public apology after one of his company's delivery men accidentally redialed a customer and left a racist rant on his voicemail. The man was mostly complaining about the tip he'd been given, and the four-minute message was filled not only with racial slurs, but the sound of laughter coming from his coworker — both were fired. That came not long after another incident in New York City in 2012.

The year 2016 wasn't great, either. A 17-year-old customer received his pizza (from a Denver location) with a racial slur on the receipt in July, just a month after a Louisville, Kentucky woman got her pizza with another racist name written on it.

As for Papa John's stance, they issued a statement after the Denver incident that read, "This action is inexcusable and doesn't reflect our company values."

They were sued over their slogan

You're probably familiar with Papa John's slogan: "Better Ingredients. Better Pizza." It's straightforward enough, but in 1998, Pizza Hut sued them for false advertising. The claim was that there was no actual, concrete evidence that Papa John's was using better ingredients, or that those ingredients made a better pizza. According to Pizza Hut, the whole thing was in violation of something called the Lanham Act, which protects consumers from purposefully misleading advertising. In what was only the first blow to the story, Pizza Hut won, and Papa John's was ordered to pull all the so-called misleading marketing materials.

Papa John's appealed, saying it was clearly meant to be an opinion, not scientific fact, while also saying that there was no scientific proof that Pizza Hut had the "best pizza under one roof," so what gives? The ruling was overturned on appeal, and that's why you still hear the slogan today. (And it's also why Pizza Hut and Papa John's really, really hate each other.)

They were weirdly secretive about ingredients

Papa John's adopted their "Better Ingredients. Better Pizza." slogan in 1995, and you might think that with so much invested in how their ingredients make their pizza better, they'd be more than happy to tell everyone just what they were eating when they took a bite out of a Papa John's pizza. When food writer and journalist Melanie Warner tried to track down a Papa John's ingredient list in 2013, she found herself stonewalled at every turn. She found no ingredient lists on their website, in their stores, or in its own literature. Phone calls and requests for allergen information went unanswered, and when she went to her local Papa John's locations, it turned out that the employees didn't really know what was in the boxes they got and what the base ingredients were — only that they could confirm the dough they got was frozen. Warner noted that not only did many chains voluntarily publish their ingredients, but that it was odd that Papa John's would opt out when their entire advertising campaign rested on the laurels of their ingredients.

The media ran with the discovery that proud Papa John's was mum on the actual details and today, you can find a list of all Papa John's ingredients on their website.

Papa John's has been accused of privacy violations

The Twitterverse exploded in 2015 after Iggy Azalea took aim at Papa John's in general and one of its drivers in particular after she found out he'd shared her phone number with his family, who then started calling her. According to her stream of tweets, not only did her number get shared, but she claimed that Papa John's refused to share photos of their employees so she could identify the driver.

That was in February, and in March she talked a little bit more with Ryan Seacrest about what happened and clarified that not only was she not pursuing legal action but that all was well. She had been issued a formal apology from corporate and been assured that all the appropriate disciplinary action had been taken, but Vice used the incident to bring up a major issue when it came to ordering food online, over the phone, or paying with a credit card. If you read the fine print of your Papa John's online account, their privacy policy states that not only do they adjust special offers based on your ordering preferences, but there's a portion that says it's only by opting out that you forbid them from selling your information to "other merchants." That information is then compiled and sold by companies like NextMark, which means that not opting out of offers like Papa John's means that you might just find yourself on lists you'd prefer not to be on.

Schnatter's first job was at a pizza shop

Schnatter didn't start big. As a 15-year-old in Indiana, Schnatter got his first job at Rocky's Sub Pub, where he started out washing dishes and worked his way up to pizza maker. He credits this first gig with inspiring his life-long passion for pizza. Wouldn't it be nice if we all figured out our career paths at 15?

Schnatter didn't get into law school

After high school, Schnatter got a business degree from Ball State University, working his way through school at yet another pizzeria. After graduation, he applied to law school at The University of Louisville but was rejected — a tough obstacle that may very well have been the best thing to happen to him back then. Not long after that rejection, he jumped at the chance to help his father run Mick's Lounge, a tavern in Jeffersonville, Indiana, that wasn't doing well. That's where it all began for Schnatter.

He sold his car to fund his dad's tavern

In order to help dig his dad's tavern out a financial hole, Schnatter sold his prized possession, a 1972 Chevy Camaro Z28, for $2,800. He missed the car so much that he initiated a hunt for it after he became successful, and even offered a finder's fee for anyone who could lead him to it. In 2009, he bought his beloved Chevy back for a whopping $250,000, and paid $25,000 to the people who pointed him in the right direction — the family he had sold the car to in the first place.

His first pizza shop was in a broom closet

Once his dad's tavern was in good standing, Schnatter knocked out a wall in the broom closet and started making pizza with used equipment. After a year of delivering pizzas out of the back of a bar, he had made enough in profits to open his first shop, the very first Papa John's.

Since then, the business has grown exponentially. Today, there are more than 4,700 Papa John's restaurants in the world, including more than 1,200 international shops in 37 countries. That's a long way to come from a pizza oven in a broom closet.

Schnatter isn't a talker

As much as he's in the spotlight, you would probably expect Schnatter to be a talker. He did make himself the spokesman for an international pizza chain, after all. But not too long ago, he was terrified of public speaking. After working with a coach, he's now less afraid of speaking in public — which is a good thing, considering how often he appears on our TV sets nationwide and does leadership and motivational speaking on the side.

Still, he readily admits he's not a word guy. In high school, he scored a 790 out of 800 on the math SAT, but only a 200 on the verbal test. "I have a real problem with the English language," he once told a group of students. Turns out you don't have to be a big talker to make it big.

He's a tough boss

Schnatter's success makes it apparent that he has high standards, but some former co-workers claim he takes things too far. Marketing expert Jack Trout, who has worked with Schnatter in the past, said Schnatter made others nervous, saying he walks up and down the halls "like a big cat, stalking." His attitude may have been the reason behind the company's once high turnover at the executive level, but Schnatter says his methods are less harsh these days, and points to the fact that his current executives have an average of 12 years with the company.

He inspires fear at the store level, too. Schnatter likes to make surprise visits to his pizza shops to inspect their product for quality control, sometimes even dumping pies if they don't meet his standards. "John's standards are so high," Chris Sternberg, a Papa John's vice president told People. "When you meet them you've really done something."

Schnatter owns a pretty ridiculous mansion

According to the popular real estate blog Curbed, Papa John resides in an over-the-top mansion in his home state of Kentucky that boasts a remarkable 40,000 square feet. The estate is complete with such lavish features as a 22-car garage, car wash, and 6,000-square-foot carriage house in addition to regular rich people amenities like a golf course and a swimming pool. To put these numbers in perspective, a typical one-bedroom apartment in New York City is about 750 square feet on average. Millionaire former presidential candidate Mitt Romney was reportedly in considerable awe upon visiting Schnatter's home. Coming from a man worth a whopping $250 million himself, that's really saying something.

He left the company twice but came back both times

In 2006, John Schnatter stepped away from the day-to-day operations at Papa John's to focus on family (and golf) before resuming his primary leadership position two years later. According to USA Today, he went as far as to give up the CEO title later on, only to once again take back the head-of-the-table position.

He loves his town

In Anchorage, Kentucky, the suburb of Louisville that Schnatter calls home, he's loved and respected. According to local news station WDRB, residents were concerned when he moved to town and started buying up properties, but he's since earned the respect of most neighbors. He owns most of the buildings in the town's main square, including the one that house's the town's prized restaurant, and has remodeled each building to improve the overall look of the town. "What I am trying to do is enhance the town, protect the heritage, and not have my neighbors mad at me," Schnatter told a local newspaper, The Courier-Journal, in 2007.

There are major ties to the University of Louisville

It's certainly no secret that Papa John's — and John Schnatter himself — have some pretty serious ties to the University of Louisville. It's emblazoned all over the campus, after all, most visibly in the name of their football stadium, Papa John's Cardinal Stadium. It's been called that since its 1998 opening, and the Schnatter family has been linked to the university for several generations. In 2015, Papa John's made a $4.64 million grant to the university that pushed their donations up over the $20 million mark, with most going toward the development of the university's sports teams and their stadiums. According to Schnatter's statement, "We've been fairly successful in business at Papa John's, and we want to share that with entrepreneurs and teach these kids how to be successful."

Schnatter did cut some ties in April 2017, when he resigned from U of L's athletic board. Before his resignation, he was pretty vocal about his belief that the school's athletic department needed to be "fixed," and just what went on behind the scenes remains unclear. Also unclear is his 2017 declaration of a conflict of interest in U of L, leading some to speculate about just what the ties between the Schnatter family and the university are. University trustees are required to divulge any conflicting interests, and while Schnatter did release documents saying that there were some, he declined to make those public.

They fund a number of controversial "free enterprise centers"

A good portion of the funds donated to the University of Louisville by Papa John's was earmarked for the John H. Schnatter Center for Free Enterprise. According to the news release, the center was designed for exploring — and teaching — "the role of free enterprise and entrepreneurship in advancing society."

U of L isn't the only university to get one of Papa John's free enterprise centers — in 2015 they announced a $12 million gift to the University of Kentucky that would be used to found another such center. This one, the John Schnatter Institute for the Study of Free Enterprise, didn't escape controversy when it was suggested that the gifts came with some strings attached. A similar center gifted to Florida State University caused some major outrage when the fine print became public, and it was found that the Koch Foundation — who Papa John's partnered with — could influence the decisions made by the institution, even including who was hired and what was being taught. The controversy prompted UK to clarify that all decisions would be made by the university, not the foundation sponsoring the institute. Oddly, the contract between U of L, Papa John's, and the Koch Foundation was made with the agreement that the details would be kept confidential.

Schnatter is a noisy neighbor

Schnatter has gone out of his way to make nice with his Louisville neighbors, even building a 2-mile walking trail on his property that's open to the public. But some nearby residents started running out of patience when he opened up his own personal helicopter landing pad on his property. In May 2016, a local news station dug up 12 email complaints from neighbors regarding the noise.

He has publicly supported Republican agendas

It's no surprise that Papa John's recognizable red shirt and official company color is bright red. John Schnatter is an extremely rich and very public supporter of the Republican party and its conservative political agenda. A rich guy who wants to protect his wealth? Shocking. According to The Arizona Republic, Schnatter contributed a pretty sum of $20,000 to the party in July 2016 alone. In 2012, he openly criticized President Obama's healthcare plan by claiming that it would increase the price of pizza by 14 cents — the projected cost of providing insurance to his full-time employees! Many customers spoke out, saying they wouldn't mind paying an extra dime and nickel the next time they craved greasy pizza accompanied by that delicious garlic dipping sauce.

They hired mystery shoppers across the country

With so many stores nationwide, you might be wondering how John Schnatter deals with quality control of the pizzas that go out under his name. The answer? Mystery shoppers. When sales numbers plummeted in 1999, John knew he had to do something to reverse the slump. He put forth an initiative to employ anonymous shoppers to visit Papa John's locations for the purpose of tasting the pizzas and ensuring that they were up to standards. And it worked.

They're spending millions to go clean

Papa John's started their "Better Ingredients" campaign when the market looked pretty different, and in 2013 food bloggers started taking aim at them for using things like MSG and trans fats. Over the next two years, they isolated 14 ingredients they were going to be removing from their restaurants, and most were things like preservatives and artificial coloring. The move would come at a staggering cost, and Papa John's promised to spend $100 million a year to find alternative, better ingredients until all 14 were eliminated. According to Schnatter, he was cleaning up Papa John's menu long before that, starting in 1996 when he pulled a particular sausage from the menu after visiting the Kansas factory.

In 2016, Papa John's became the first nationwide pizza chain to completely eliminate high-fructose corn syrup, promising they weren't compromising on taste in the process. Their "clean label" changes also eliminated things like caramel color, vanillin, and preservatives like phosphoric acids. As representatives said, "This is a part of a changing consumer landscape. [...] if we can help clean up the category and get other people to clean up their menus, then that's a good thing, too."

He's claimed protesting NFL players are hurting his business

In 2017, Papa John's experienced what might be the very definition of a rocky road. After record profits in 2016, they released less-than-stellar financial reports for the third quarter of 2017. Things were so dismal shares dropped 11 percent after the numbers went public, and the net worth of Papa John himself dropped $70 million. You don't have to feel too badly for him — Forbes says he's still worth around $801 million — but he took it personally. According to Schnatter, the losses were the fault of the NFL and their inability to resolve the controversy around players kneeling during the national anthem. Papa John's is the official pizza sponsor of the NFL, after all, and more in-depth reports on ESPN showed just how much Schnatter blamed the NFL for his company's failings.

"Leadership starts at the top, and this is an example of poor leadership," he said. Those feelings were echoed by CEO Steve Ritchie, who added they blamed the NFL completely for their failing numbers. They even pulled some of their advertising, at the same time they said they expect to continue to see their bottom line suffer "…unless a solution is put in place."

Papa John's was hailed as the official pizza of the alt-right

Schnatter pointing the finger at the NFL and blaming the ongoing player protests for his own company's declining business was just opening a whole can of ugly, ugly worms. It was only days later that neo-Nazi site The Daily Stormer (via The Huffington Post) published a piece on how Schnatter's accusations and opinions would make Papa John's a perfect candidate for becoming the official pizza of the alt-right. The suggestion was met with widespread, racist glee.

According to Business Insider, Schnatter's comments on the NFL protests aren't the only reason he's being hailed as a new pizza champion for the alt-right. He also denounced Obamacare in 2012, and later donated money to Donald Trump's presidential campaign. 

Not surprisingly, Papa John's went into damage control mode, with an official statement to The Huffington Post from Peter Collins, senior director of public relations. It read, in part, "We condemn racism in all forms and any and all hate groups that support it. We do not want these individuals or groups to buy our pizza."

He's stepping down

After 2017 proved to be a rough year for Schnatter, he announced he would be stepping down from his position as CEO in 2018. The move came on the heels of controversy after Schnatter blamed NFL protests for falling business numbers, and the following PR nightmare of white supremacist groups tripping over themselves to support him.

According to the Chicago Sun-Times, the Papa John's camp is keeping mum on whether or not the controversy is the reason he decided to step down in favor of longtime Chief Operating Officer Steve Ritche, or if there are other things going on behind the scenes. Ritchie also refused to comment on the reasons behind the shake-up. He did say it's "the right time to make this change," and added that Schnatter would still be the face of the company — especially when it comes to marketing.

It's also worth noting this isn't the first time Schnatter stepped down as CEO. He did it in 2005, too, but was back in the big chair three years later.